Venture Capital Perks Up

But The Dot-com And Telecom Bubbles Have Left Investors Wary.

Investors attending the Florida Venture Forum conference in Orlando on Thursday sounded genuinely interested in finding companies in need of their money.

Though the two-day meeting is all about putting venture capital and businesses together, the economic downturn that began in 2001 put a pall over the process in the past few years. But with financial markets in a rebound, investors are once again looking for prospects.

"I definitely see the pace picking up in 2004," said John McDonald III, managing director of Hyde Park Capital Partners, a Tampa investment banking firm. "I think it will be gradual, but it is coming."

McDonald and others attending the conference at The Peabody Orlando hotel on International Drive say the return of the venture-capital market will be built on the lessons investors learned during the downturn, when losses on dot-com companies and other start-ups led to a huge pull back.

One of the biggest areas of optimism in Florida centers on Palm Beach County, where the California-based Scripps Research Institute plans to build an East Coast campus that could eventually spawn a new regional biotechnology industry.

Scripps, which will use state financial incentives to build the Palm Beach center, discussed its plans with conference attendees Thursday evening. McDonald cautioned that the financial benefits radiating from Scripps could take years to arrive.

"If people think we will have a booming biotech industry, they won't be so happy," McDonald said. "Biotech is a very slow moving industry. I think this will take a long time."

Most of the investors were more interested in the immediate -- hearing pitches from 21 companies seeking funding at the conference.

Steve Lux, Florida director for the Stonehedge Capital fund, said companies that win funds in 2004 need strong business plans and a track record. Investors, he said, are still reluctant to put money in new companies, which they did eagerly during the tech and telecom bubbles of the late 1990s.

"In the boom, you saw people willing to throw big bucks at new ventures," Lux said. "Not any more. But economic conditions are improving and people are looking around again."